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2ndRick
07-21-2011, 11:29 AM
In this profile, IP member Joe Zoz from Leon Speakers was able to put me in contact with Ethan Kaplan who manages the marketing for the company.

When Gary and I decided to move forward with this idea as the special series topic for the Month of July, I went to work creating a short list of questions for the selected manufacturers for the inaugural series.

Ethan replied to our list of questions to explain some of their philosophies behind building speakers to order in the backyard of the US auto manufacturing industry.

So here goes:

https://lh4.googleusercontent.com/-EI3h_1P22wQ/TihP6PuXayI/AAAAAAAAEzs/44get3NkV0c/s400/leon-logo-black.jpg

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Rick Murphy, IntegrationPros:
First question: How long has the company been in business?

Ethan Kaplan, Leon Speakers:
Leon Speakers started in 1997.

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Rick:
2): Where are the locations of your production facilities?

Ethan:
We custom build to order everyday in Ann Arbor, Michigan.
Home of the Big House.

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Rick:
3) How many people are employed in total?

Ethan:
Currently, Leon employs ~35 people in the Ann Arbor facility (roughly 20 people in the manufacturing side and 15 people on the office side), and sells through a network that includes more than 15 independent manufacturer’s rep firms around the country.

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Rick:
4) What percentage of the SKUs in your product offering are produced in North America at some level?

Ethan:
About 98% of our products are manufactured and built-to-order in our facility in Ann Arbor, MI, including ALL of our sound bars, subwoofers, on-wall and in-wall surrounds, and brackets.

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Rick:
5) In the spirit of the American Automobile Labeling Act, requiring automakers to report what percent of the parts by value in any given model hail from both the United States and Canada. What is the rough percentage of N. American content of the components and materials of your products?

Ethan:
It is first important to understand the notion of “value” for LEON products. As each product is built-to-order, for our dealers, there is inherent value in the manufacturing processes that we’ve developed and craftsmen that we employ in order to supply hand-made, custom speakers in 3-5 business days.

That said, from a bill of materials standpoint, depending on the product line, anywhere from 60%-80% of the components come from North America (mostly the US). This is heavily weighted by the cost of drivers. We use fairly expensive woofers and tweeters, and therefore, in our L/C/R products, some of which feature up to 8 woofers and 3 tweeters in one cabinet, the number is closer to 60%. However, in our center channels, in which we use just 2 woofers and 1 tweeter, the number is closer to 80%.

We are always seeking driver manufacturers in the United States, but have had limited, if any, success.

We have recently been considering working with old automotive machine and supply shops here in Detroit that are equipped to handle quality manufacturing in order to bring new expertise to our state. We’ll see where that goes. Still, Michigan’s rich history of manufacturing affords us the ability to go across town rather than across the globe to have access to all the metal shops, CNCs, water-jets, and other specialty equipment. A great example is our flagship SEVEN Series – we have a company right here in town that makes both the custom bolts and the solid aluminum baffles for these products.

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Rick:
6) What would you say is the difference in the value proposition that you offer to the dealers and end users compared to your peers who utilize off-shore production? (materials quality, labor force, logistics, JIT capabilities, etc.)

Ethan:
The Made in America ethic, mixed with our build-to-order concept creates a lot of value for our dealers, and ultimately our end users. First, for our dealers, this equates to better management of cash flow by minimizing inventory holding costs and associated risks. We never ask dealers to carry stock items – instead, they order what they need, exactly when they need it. We essentially become an extension of their facility, and with our vast product line, we can be their one-stop audio solution. At the same time, because Leon manufactures everything to the specifics of an order, we never do manufacturing runs of single products that we may have to liquidate and push into our dealers’ hands, regardless of whether or not they need the product.

From an end user’s perspective, consumers can rest assured that they are not just getting product because the dealer has to “turn” inventory or got a great deal on a cheap product, rather they are getting the perfect solution for the requirements of the job. We urge more of our dealers to look for more Made in America vendors – it’s good for them, it’s good for their customers, it’s good for us, and it’s good for America.